MTN lifts interim revenue by 17.5%

MTN Group reported on Wednesday (8 August) a healthy 17.5% rise in revenue to R66.426 billion for the six months ended June 2012.

It highlighted solid growth in South Africa, Iran and Ghana of 9.5%, 29.9% and 19.9% respectively. Nigeria’s reported revenue grew 16.5%.

Adjusted headline earnings per share increased 14.3% to 537.4 cents, from 470.1 cents in 2011.

MTN Group also reported a rise in operating profit to R21.641 billion, from R17.767 billion before.

The group increased its subscriber numbers by 6.9% to 175.997 million from
31 December 2011. MTN South Africa delivered a good performance for the six months
to 30 June 2012, increasing its subscriber base 6.8% to 23.5 million.

Group ebitda, which includes the partial reversal of the previously deferred Ghana Tower Company profit and Uganda tower profit, increased 18.2% to R29.798 billion.

MTN’s board has decided to increase the full year dividend payout ratio to 72% from 70%. The impact on MTN’s cash outflow remains neutral, it said. The interim dividend of 321 cents is calculated at 30% of the prior full year’s adjusted HEPS.

In South Africa, revenue improved  to R19.78 billion, from R18.075 billion, with ebitda up to R7.02 billion, from R6.36 billion.

Also in SA, at 30 June 2012, there were 11.9 million data users with 4.4 million smartphones. Interconnect revenue decreased by 15.3% as a result of the lower interconnect rate.

Post-paid average revenue per user (ARPU) continued to trend downward to R265 due to the increased uptake of lower value hybrid packages and telemetry SIM cards.

Prepaid ARPU decreased to R92 largely due to the interconnect rate cut and lower marginal prepaid subscribers. Reported blended ARPU was R123.

The group notes that data usage continues to improve through an aggressive 3G rollout, a comprehensive device strategy and appealing local content across operations. Mobile Money, which has been launched in 13 countries, recorded 7.3 million users.

Data, excluding SMS, contributed 10.0% to group revenue, increasing 69.6% to R6.666 billion. MTN said its data strategy will be further supported by the West African Cable System (WACS), which became operational in May 2012, with landing stations in eight countries.

Group operating costs increased 17.0% to R37.194 billion. “This was largely driven by higher direct and operating costs related to network rollout and the cost of handsets and accessories in South Africa, which increased mainly due to adverse foreign exchange
movements and higher volumes of handset sales. The weaker rand against the operational currencies had a negative impact on reported operating costs,” the group said.

Capex increased 77.7% to R10.144 billion when compared to the same period last year. “Importantly, the capex target of R24.772 billion is on track for the year with a significant portion of full year authorised capex committed to projects. Rollout is expected to accelerate in the second half of the year,” MTN said.

During the six month period, MTN Holdings Proprietary Limited acquired 15.6 million MTN shares at a total cost of R2.088 billion. In total, the group has repurchased 1.2% of issued shares at the cost of R3.018 billion since the buy-back initiative was implemented in late 2011.

Looking ahead, MTN said it remains optimistic notwithstanding challenging market
conditions. The group adds that it is committed to creating value for stakeholders through improved shareholder returns and enhancing its business model to better position itself as markets mature and competition intensifies.

“MTN’s key priorities over the next six months are to maintain its leadership position with an increased focus on customer experience and countering competition through innovative and relevant products and services.”

“This strategy will be supported by continued investments in infrastructure to ensure quality and capacity, the rollout of efficiency initiatives and value accretive M&A opportunities,” it said.

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MTN lifts interim revenue by 17.5%